The UK energy price cap is expected to rise by 5% in January 2024, which means that a typical household who pays by Direct Debit will face an annual bill of £1,931, up from £1,834 in the previous quarter.
This increase comes at a “difficult period” for struggling households, as many are already facing higher costs of living due to the pandemic, Brexit, and inflation.
Designed to protect customers
The energy price cap is designed to protect customers from unfair price hikes and ensure that they pay a fair price for their energy. However, it does not limit the total bill, which depends on how much energy is actually used.
Therefore, customers are advised to shop around for better deals and switch to cheaper tariffs if possible. This, however, is easier said than done.
It is also recommended that struggling customers contact suppliers if they have difficulty paying their bills and seek help from schemes, grants, and benefits.
The UK energy price cap is a limit on the maximum amount that energy suppliers can charge customers on standard or default tariffs for each unit of gas and electricity they use. It is set by Ofgem, the energy regulator, every three months based on the underlying costs of energy and inflation.
See Ofgem analysis here.
